Retirement Blog

Secrets of successful saving

In sharp contrast to some of the more ridiculous retirement news items out there is this silver lining on the retirement cloud: A sizeable portion -- nearly two-thirds -- of the American population with assets of $100,000 or more is on track to meet or exceed their retirement planning goals. Roughly a third say the recession did not adversely affect their retirement plans. This is according to a survey by PNC Financial Services Group released this week.

Take it from an avid follower of retirement news: It's rare to run across a retirement survey that's full of hope and promise. Survey findings usually reveal how woefully unprepared Americans are for retirement. Just last week, the Employee Benefit Research Institute released findings suggesting that about one-third of American households won't be ready for retirement even if they toil away in the workforce until they're 70 years old.

EBRI is a great source of reliable information, so that bit of news put me in a gloomy mood.

Elite savers

OK, so the PNC survey does focus on a select group of people -- those with investable assets of at least $100,000, plus a minimum of $25,000 in liquid investable assets, or a minimum of $250,000 in total investable assets if they don't meet the $25,000 liquid asset criterion. One quarter of the respondents have $1 million or more. This does not represent an exclusive subset of wealthy people. It represents nearly 20 percent of U.S. households.

It's the creme de la creme of savers -- people who have made the conscious decision to set aside for tomorrow money they could blow today.

Fully 42 percent of those who are not yet retired say that saving money for retirement is their primary goal. So what are their secrets, anyway?

Among those who are not yet retired (820 respondents out of 1,038):

Forty percent think about retirement very often (at least once a month), and 43 percent think about retirement quarterly -- probably when they get their statements.

Seventy-nine percent have money in a workplace retirement plan such as a 401(k) or 403(b).

Seventy-two percent invest as much as they can in their workplace plan.

Thirty-one percent strongly agree with the statement that they have always maxed out their plan contributions.

Forty-five percent say living within their means ranks as one of the two most important retirement-related decisions they have made in their lives.

The other high-ranking retirement decisions were putting as much money as possible into a workplace retirement plan (39 percent) and starting to save at a young age (36 percent).

Sixty-two percent save in an account separate from their workplace plan.

Forty-five percent put some or all of their bonuses or commissions into long-term savings.

You get the idea. These savvy savers have made it a priority to pay themselves first. This is downright inspirational. Young people with jobs are in a particularly good position to benefit from this information.

Spread the word! It is so essential these days to start saving for retirement as early as possible. Even if you're late in the game, get started now and save as much as you can.

Saving for retirement is your ticket to freedom. Not saving for retirement will likely result in working past 70.

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4 Comments

Avo

September 08, 2012 at 10:10 pm

I fit the profile on most every point. Retired at age 55 in late 1993. My current assets are worth less than when I retired, but the dollar number is approximately twice as much.

NI

September 08, 2012 at 7:30 pm

I agree with the point that you got to start saving young and you have to pay yourself first. The most important thing is to live within your means and to have a discipline to save regularly. I hope to be able to retire one day with comfort.

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